COURT FILE NO.: 03-239/19

DATE: 20201211

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: BARBARA LOCKHART personally and in her capacity as attorney for property of June Lockhart, Applicant/Moving Party/Responding Party

AND:

ROBERT LOCKHART personally and in his capacity as attorney for property of June Lockhart, Respondent/Responding Party/Moving Party, and JUNE LOCKHART, Respondent

BEFORE: Dietrich J.

COUNSEL: Kimberly Whaley, Matthew Rendely, and Bryan Gilmartin, for the Applicant/Moving Party/Responding Party

Robert Lockhart, self-represented Respondent/Responding Party/Moving Party

Jacob Kaufman, for CIBC Trust Corporation, Estate Trustee During Litigation

HEARD: October 14, 2020

ENDORSEMENT

Overview

[1] Barbara Lockhart (the “Applicant”) and Robert Lockhart (the “Respondent”) are siblings, and two of the three children of June Lockhart (“Mrs. Lockhart”). Mrs. Lockhart’s third child, Christine Lockhart, is a person under disability as defined in the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[2] Mrs. Lockhart is 90 years of age. She is a widow. Her husband, the late Frank Lockhart (the “Deceased”), died more than two years ago on October 3, 2018 in Bowmanville, Ontario.

[3] Pursuant to a power of attorney for property dated June 27, 1994, Mrs. Lockhart appointed the Applicant and the Respondent to act jointly as her attorneys for property. Following the Deceased’s death, Mrs. Lockhart was declared incapable of managing her property.

[4] The Deceased died leaving a last will and testament dated September 11, 1974 (the “1974 Will”). Mrs. Lockhart is the sole beneficiary of the 1974 Will. Had she predeceased the Deceased, the 1974 Will provides that the residue of the Deceased’s estate (the “Estate”) would be divided equally among the Deceased’s children alive at the time of his death.

[5] No one has applied for a grant of probate respecting the 1974 Will. This is largely because the Applicant and the Respondent, as Mrs. Lockhart’s attorneys for property, cannot agree on the management of Mrs. Lockhart’s interest in the Estate. In the meantime, CIBC Trust Corporation (“CIBC Trust”) has been acting as Estate Trustee During Litigation (“ETDL”) pursuant to an order of this court made on March 16, 2020.

[6] The Applicant asserts that an Estate Trustee should be appointed forthwith. The Estate Trustee could then apply for a Certificate of Appointment of Estate Trustee with a Will and administer the Estate, which would include a distribution of the entire residue to Mrs. Lockhart. The Applicant and the Respondent would then, on Mrs. Lockhart’s behalf, invest and manage the property she inherited.

[7] The Respondent asserts that the Deceased told him a few years before he died that he had made a will subsequent to the 1974 Will, which disinherited Mrs. Lockhart. Therefore, in order to protect Mrs. Lockhart from the threat of this disinheritance, the Respondent argues that the attorneys for property should make an election under the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”) in respect of the 1974 Will. The election would be in favour of an equalization amount for Mrs. Lockhart, as opposed to the benefits provided to her under the 1974 Will. The equalization amount would be equal to one-half of the difference between the Deceased’s net family property and Mrs. Lockhart’s net family property at the time of his death. Their respective net family properties would be calculated pursuant to the formula set out in the FLA.

Matters Before the Court

[8] The court is asked to rule on three matters:

(1) The Applicant brings a motion seeking an order terminating the tenure of the ETDL and appointing CIBC Trust as the sole Estate Trustee of the Estate, and related orders pertaining to the administration of the Estate.

(2) The Respondent brings a motion for an order directing the attorneys for property to file an election for an equalization amount under the FLA, and, in the alternative, an order extending the period during which Mrs. Lockhart may make an election under s. 6 of the FLA.

(3) The Applicant seeks an order that the 1974 Will be declared the last will and testament of the Deceased and that the balance of her application be dismissed.

The Applicant’s Motion

[9] At the hearing, I decided that the role of CIBC Trust as ETDL would be terminated and CIBC Trust would be appointed as Estate Trustee. My reasons for this decision follow.

[10] Under the terms of the 1974 Will, the Deceased named Mrs. Lockhart as his Executrix and Trustee. Mrs. Lockhart cannot assume this role because she is incapable of managing her property. The alternative Executor and Trustee named in the 1974 Will is deceased. Of the three children of the Deceased, Christine Lockhart is unable to act and the Applicant and Respondent cannot agree to act together as Estate Trustees.

[11] At a case conference held on December 13, 2019, the Respondent agreed that he would renounce his entitlement to apply for a Certificate of Appointment of Estate Trustee with a Will in respect of the 1974 Will (the “Certificate”) and would support the Applicant’s application for the Certificate. This agreement was reflected in my endorsement dated December 19, 2019. Without taking any formal steps to appeal the consent order, the Respondent has attempted to resile from his agreement.

[12] On March 16, 2020, CIBC Trust was appointed ETDL. The appointment was made on a motion brought by the Applicant on an urgent basis at the beginning of the COVID-19 pandemic. At that time, the Estate had suffered a decline in value of approximately $2 million as a consequence of the deleterious effect of the pandemic on the global capital markets. The Respondent consented to the appointment of CIBC Trust as ETDL and agreed to its fees as set out in a schedule attached to the order.

[13] The Respondent objects to the appointment of CIBC Trust as Estate Trustee based on its proposed fees. The proposed fees are very similar to the fees CIBC Trust is charging as ETDL.

[14] The Respondent submits that there are plenty of lawyers who would take on the role of Estate Trustee for less compensation. He offers no sworn evidence in support of this assertion. In argument, he stated that Paul Trudelle, the lawyer who has been advising him in matters relating to the Estate, is one such lawyer and that he would charge “around $20,000.” However, there is no sworn evidence respecting Mr. Trudelle’s willingness to act or the fees he would charge. And in the face of the Applicant’s opposition to this appointment, the Respondent conceded that Mr. Trudelle would be in a conflict of interest, having advised the Respondent on the issues at hand. The Respondent then argued that there are many lawyers who would and could take on the role of Estate Trustee and charge considerably less than CIBC Trust, and that an order should be made directing the attorneys for property to retain one such lawyer. The Respondent offered no evidence in support of his proposal that the court appoint such a lawyer. He further submits that he would volunteer to act as Estate Trustee for no compensation. The Applicant rejects this offer.

[15] I am satisfied that CIBC Trust is a suitable candidate to administer the Estate. It is a neutral third-party corporate trustee in the business of administering estates. No administration bond would be required on its appointment. The assets of the Estate have already vested in CIBC Trust as ETDL and it is familiar with those assets, as well as the ongoing litigation between the Applicant and the Respondent regarding the Estate and the management of Mrs. Lockhart’s property.

[16] CIBC Trust has agreed to charge fees that are lower than the rule-of-thumb percentages often applied in the administration of estates. It has also agreed not to claim a care and management fee.

[17] In all of the circumstances of this case, I find that it is appropriate for CIBC Trust to transition from the role of ETDL into the role of Estate Trustee so that the Estate may be properly administered for Mrs. Lockhart’s benefit.

The Respondent’s Motion

[18] The Respondent short-served an amended notice of motion, to which the Applicant did not have time to respond. The Respondent’s motion is supported by the affidavit of Meshal Asmati. Ms. Asmati is a friend of the Respondent and the secretary of one of his colleagues. She attests to what the Respondent has told her and states that she believes it to be true. The Respondent does not deny that Ms. Asmati’s evidence is all hearsay and double hearsay.

[19] In the amended notice of motion, the Respondent seeks an order directing the Applicant and the Respondent, as Mrs. Lockhart’s attorneys for property, to file an election for an equalization amount pursuant to ss. 5(2) and 6(1) of the FLA. Such an election would deem Mrs. Lockhart to have renounced her entitlement to the whole of the Estate Instead, she would receive an equalization amount from the Estate. The remainder of the Estate would be distributed in accordance with 1974 Will as if Mrs. Lockhart had predeceased the Deceased. In other words, the Applicant, the Respondent, and Christine would share the residual Estate equally. In addition to the order directing the filing of the election, the Respondent seeks an order directing the Applicant and the Respondent to deliver to Mrs. Lockhart their respective shares of the Estate for her use during her lifetime, or an order directing each of them to hold their shares in trust for the benefit of Mrs. Lockhart during her lifetime. Christine would receive her share without any condition according to the Respondent’s proposal.

[20] The Respondent seeks other orders in the alternative, such as an order requiring the attorneys for property to file a conditional election in respect of the later will, which would apply if and when the later will is discovered, but would not prevent an application for the Certificate in respect of the 1974 Will. The Respondent also seeks a further order extending the time to file an election to protect Mrs. Lockhart should a later will materialize. All of the relief sought, he submits, is aimed at protecting Mrs. Lockhart from a real threat of disinheritance.

The Later Will

[21] The evidence of the existence of a later will (apart from Ms. Asmati’s hearsay evidence) is the Respondent’s unsworn evidence that, a few years before his death, the Deceased told him that he had made a will that disinherited Mrs. Lockhart. The Respondent acknowledges that this is hearsay evidence but asserts that it is admissible hearsay because it is necessary and reliable, and he is a credible person.

[22] The Respondent also proffered unsworn evidence that the Applicant told him the Deceased had shared with her the existence of a subsequent will that disinherited Mrs. Lockhart. He said that the two of them looked for the later will at the Deceased’s residence in Bowmanville, where the Deceased died. The Respondent points to email exchanges with the Applicant in which she expresses doubt about whether the Deceased actually made a later will and questions if he was confused when he mentioned disinheriting Mrs. Lockhart. In the emails, the Applicant also queries whether the Deceased was perhaps thinking about making a later will, but never did.

[23] The Applicant’s sworn testimony is that in the days prior to his death, the Deceased told her that he had made a new will and that it was kept in his bedroom. She further testified that on the date of the Deceased’s death, the Respondent and she searched the Deceased’s bedroom and only found the 1974 Will. The Applicant testified that she does not believe a later will exists. The Respondent urges the court to find that the Applicant is not credible on this point.

[24] Despite her stated belief that a later will does not exist, the Applicant sought legal advice and made efforts to locate an updated will made by the Deceased. She contacted the law firm of Strike and Phillips LLP in Bowmanville. The principal lawyers at that firm were friends of the Deceased, but had no knowledge of any will made by him. The Applicant also contacted Angela Anderson Law in Bowmanville, to no avail. She contacted Purcell Law Office, where the 1974 Will had been prepared, also to no avail. The Applicant then reached out to the Deceased’s retired accountant, William Carveth, who had no knowledge of a later will. The Applicant searched the Deceased’s safety deposit box at the Royal Bank of Canada in Bowmanville and found no later will or evidence of the existence of a later will. The Applicant contacted the Deceased’s brother-in-law, John Ball, a lawyer in Oakville, Ontario. Mr. Ball had no knowledge of a later will made by the Deceased. And in November 2018, the Applicant undertook a second, more thorough search of the Deceased’s Bowmanville residence and found no later will or any evidence of such will having been made.

[25] The Respondent also conducted a search of the Deceased’s Bowmanville residence. Ms. Asmati testified that the Respondent told her that he spent a great length of time “going through the contents of the Bowmanville house, including making extensive use of an inspection camera to look behind all the wall paneling in the house, above every ceiling tile, down or up the ducts, in the attic, behind the walls in the garage, beneath every cabinet, etc.” Ms. Asmati also testified that the Respondent told her that he had spent an entire day in October 2018 visiting every law firm in Bowmanville to enquire about a later will made by the Deceased.

[26] The Applicant and the Respondent twice placed an advertisement in the Ontario Reports seeking information relating to a later will made by the Deceased. No one responded to these advertisements with relevant information.

[27] Notwithstanding these extensive and fruitless searches, the Respondent sought an order permitting him to access copies of cheques written on the Deceased’s chequing account with the Royal Bank of Canada for a period of seven years prior to the date of his death. The Respondent reasoned that he needed to see the copies of these cheques in order to determine whether his father had paid any lawyers for services that might include estate planning. The Applicant consented to the order. My endorsement, dated November 20, 2019, states: “If the cheques do not reveal any evidence of his father having retained a lawyer to prepare a later will (to the existing 1974 Will), then Mr. Lockhart agrees that he will not oppose an application for a Certificate of Appointment of Estate Trustee with a Will with respect to the 1974 Will.” None of the cheques received by the Respondent provided evidence of payment for legal services relating to the preparation of a later will.

[28] Despite the considerable and ineffective efforts to locate a later will, the Respondent argues that if an order is not made compelling the attorneys for property to make an election in favour of an equalization amount, the time for making an election under the FLA ought to be extended to afford him additional time to search for a later will. He argues that there are 55,000 lawyers in Ontario who could have assisted the Deceased in making a later will and that they should be contacted. The Respondent also submits, without elaborating, that there is a “CSIS dynamic” and that he has friends and colleagues who can help him in that regard.

[29] Based on the evidentiary record and submissions of counsel, on a balance of probabilities I am not persuaded that Mrs. Lockhart faces a real threat of disinheritance as a consequence of a will made by the Deceased after the 1974 Will. Extensive searches have been undertaken by both the Applicant and the Respondent with a view to locating any later will made by the Deceased. No such will has been found and no evidence of its existence, apart from what the Deceased may have told the Respondent and the Applicant, has been discovered.

[30] In my view, the searches and inquiries already undertaken, and the passage of more than two years since the Deceased’s death, make the likelihood of the existence of a later will very remote.

[31] Further, the Respondent has not demonstrated that an election under the FLA is necessarily in Mrs. Lockhart’s best interests. He has not provided this court with the net family property calculations of Mrs. Lockhart and the Deceased to show that she would, in fact, be entitled to an equalization amount if she elected to claim her entitlement as a spouse under the FLA as opposed to taking as a residual beneficiary under the 1974 Will.

[32] Mrs. Lockhart is the sole beneficiary of the 1974 Will. The estimated value of the Deceased’s estate at the time of his death was in the $6 million range. The litigation between the Applicant and the Respondent has deprived Mrs. Lockhart from benefiting from the Estate. She is over 90 years of age and any further delay in the administration of the Estate is unfair and to her prejudice alone.

[33] The Respondent’s motion is dismissed. I decline to order Mrs. Lockhart’s attorneys for property to make an election, or a conditional election, pursuant to s. 6(1) of the FLA. No further extension of the deadline during which Mrs. Lockhart’s attorneys may file an election shall be granted. The latest extension of the deadline will expire on January 31, 2021.

[34] Based on the record before the court, I am persuaded that it is in Mrs. Lockhart’s best interests that the 1974 Will be submitted to the probate process and administered so that she may receive the entire residue of her late husband’s estate as set out in the 1974 Will.

The Applicant’s Application

[35] The remaining relief sought by the Applicant, apart from costs, is a declaration that the 1974 Will is the last valid testamentary instrument of the Deceased.

[36] In light of my findings in the Respondent’s motion, I declare that the 1974 Will is the last will and testament of the Deceased and shall be admitted to probate.

[37] A judgment in the form attached hereto shall issue. The judgment is effective as of October 14, 2020 and does not need to be entered.

Costs

[38] The Applicant was successful on her motion and her application. She was also successful in defending the Respondent’s motion.

[39] The Applicant asserts that costs should follow the cause. She seeks costs on a full indemnity basis in the amount of $173,149.32, inclusive of disbursements ($11,792.66) and HST. These costs would be $148,945.17 on a substantial indemnity basis, and $117,454.16 on a partial indemnity basis.

[40] The Applicant submits that she was put to considerable expense in her efforts to carry out her duties as Mrs. Lockhart’s co-attorney for property in the face of the Respondent’s insistence that the 1974 Will had been revoked by a later will. Even after extensive searches and inquiries led to neither a later will nor any evidence of such, the Respondent persisted in his view that the attorneys for property should make an election on Mrs. Lockhart’s behalf that would reduce her interest in the Estate to something less than a 100 percent entitlement to the residue under the 1974 Will. The Applicant asserts that the Respondent has remained intransigent in his view that Mrs. Lockhart faces a real threat of disinheritance, even though his position is not supported by the evidence or law. Despite his agreement to not oppose an application for the Certificate, the Respondent did not support the Applicant’s application when the time came. For these reasons, the Applicant argues that it is appropriate that the Respondent pay full indemnity costs. Further, as an attorney for property, the Applicant should not bear any personal financial burden for costs related to protecting Mrs. Lockhart’s interest in receiving the residue of her late husband’s estate in accordance with the 1974 Will. As an alternative to an order requiring the Respondent to pay her full indemnity costs, the Applicant submits that the costs should be borne in part by the Respondent and in part by Mrs. Lockhart or the Estate, or both.

[41] The Respondent, who is self-represented in this matter, is not seeking any costs. He submits that he is dumbfounded by the Applicant’s costs and finds them excessive. He asserts that needless work was done by the Applicant’s lawyers. For example, he submits that following the Deceased’s death, the Respondent made a proposal in good faith to the Applicant to protect Mrs. Lockhart from a real possibility of disinheritance. The Applicant responded with two comprehensive applications seeking a wide variety of relief. One of the applications related to the appointment of an ETDL, among other relief, and the other related to the sale of Mrs. Lockhart’s residence. The Respondent submits that the latter was wholly unnecessary and vexatious because he agreed to and cooperated in the sale of the residence.

[42] I accept that the Applicant, a fiduciary, carrying out her duties to manage Mrs. Lockhart’s property, and acting in Mrs. Lockhart’s best interests, should not be personally responsible for the legal fees she incurred. That said, I do not disagree with the Respondent that the fees are very high.

[43] The proceedings were not particularly complex. There were no cross-examinations on the affidavit evidence. Though, the issues were very important for Mrs. Lockhart. Her entitlement to a sizeable inheritance was at risk, and the Applicant successfully carried out her fiduciary duty to protect Mrs. Lockhart’s interest in the Estate. The Applicant’s lawyers spent a considerable amount of time representing the Applicant on this matter. Over the course of about one year, they billed about 314 hours (including about 39 hours by articling students) relating to this application. Their Bill of Costs does not provide a breakdown of how the hours were spent. At hearings and case conferences, the Applicant was represented by at least two and sometimes three lawyers, whereas the Respondent was self-represented. The multiplicity of lawyers is a contributing factor to the high costs.

[44] I find that full indemnity costs of $173,149.32, for the application and two motions, argued over two hours, is disproportionate. Costs at this level should not be visited on Mrs. Lockhart, a nonagenarian, who is incapable of managing her property, even if the Respondent should be found responsible for a portion of them. Costs at this level would also not be in the reasonable expectation of the Respondent. Therefore, I cap the full indemnity costs at $125,000, inclusive of disbursements and HST.

[45] It is appropriate that the Respondent personally bear a portion of the costs. His own conduct also contributed to the escalating fees. He agreed to renounce his entitlement to apply for the Certificate but later tried to resile from that agreement, thus requiring the Applicant to pursue her application to have CIBC Trust appointed as the Estate Trustee. The Respondent’s pursuit of an election under the FLA on Mrs. Lockhart’s behalf was not reasonable after extensive searches for a later will had proven fruitless. Further, the Respondent did not undertake the necessary analysis to determine whether such an election, if made, would result in any benefit for Mrs. Lockhart. His position throughout the litigation has been based on speculation: (a) that a later will exists and (b) that Mrs. Lockhart would be entitled to an equalization amount if she chose to claim her entitlement under the FLA. He has not proven either. The Respondent short-served his motion in this matter, giving the Applicant no time to prepare responding materials. He also relied on hearsay evidence in support of his motion. Accordingly, I fix the costs against the Respondent at $50,000, inclusive of disbursements and HST.

[46] It is also appropriate that the Estate share in the Applicant’s costs. On the record, it appears that the Deceased alluded to a later will in discussions with the Applicant and the Respondent. This caused them, as attorneys for property for Mrs. Lockhart, to undertake reasonable searches and inquiries to locate a later will and to seek legal advice on the appropriate steps to take in this regard. I fix the costs against the Estate at $50,000, inclusive of disbursements and HST. The remainder of the costs, being $25,000, shall be borne by Mrs. Lockhart.

Dietrich J.

Date: December 11, 2020